Student Question
What caused the rapid economic growth during the Gilded Age?
Quick answer:
Causes of rapid economic growth during the late nineteenth century,the era known as the Gilded Age, included more efficient industrialization, the expansion of railroads, increased immigration, the exploitation of poor laborers by rich businessmen, and rampant political corruption.
The term Gilded Age refers to the period from the end of the American Civil War until the end of the century. Although these decades are known for their rapid economic growth, it is important to note that this growth came only as a result of rampant corruption, greed, and an enormous disparity in wealth between a few rich families and most of the rest of the nation's population.
One of the causes of economic growth was increased efficiency in industrialization. Mechanization and an abundance of unskilled workers greatly improved industrial production. Industries such as oil, steel, meat, sugar, and farm machinery developed massive trusts (a few extremely powerful companies that dominated the industries). This enabled them to keep prices of raw materials low, which spurred rapid expansion.
Transportation infrastructure boomed through the rapid expansion of railroads throughout the nation. The most consequential was the vast Transcontinental Railroad, which connected...
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the East Coast with the West Coast and the interior of the nation. Trips that used to take months could be accomplished in a matter of days.
Millions of immigrants arrived during the Gilded Age, especially from Europe, which swelled the workforces laboring for long hours and little pay in the factories and sweatshops of the rich. In fact, it is important to note that the wealth disparity between the rich and the poor was enormous. A few rich families lived in unbelievable luxury, but this economic prosperity would not have been possible without an immense labor force working for almost nothing. Although the exploitation of the poor by the rich during the Gilded Age contributed to rapid economic growth, it also eventually led to strikes and the rise of labor unions.
Another thing that aided the rapid economic growth of the era was the rampant political corruption. Wealthy industrialists paid politicians large sums of money so that big business would remain unregulated. In some places, bribery even became legalized.
What caused the rapid growth of the U.S. economy in the late 19th century?
There were a number of reasons why the United States’ economy grew so rapidly during this time. Let us look at a few.
- Technological innovation. Perhaps the most important innovation was the Bessemer Process for making steel. This process came to the United States in the late 1860s. It allowed steel to be made much more quickly and inexpensively. This allowed for a boom in things that were made from steel. Most notably, the railroad industry was able to expand greatly.
- Railroads. With the expansion of railroads, a truly national economy became possible. Railroads could move anything to any place very rapidly and relatively cheaply. This had never before been possible.
- Territorial expansion. The “opening of the West” was extremely important as well. It provided new lands where agriculture could be engaged in on a relatively cheap basis. This made food for the workers in the cities. The West was also the source of a great deal of mineral wealth that could be exploited.
- Immigration. The large factories in the cities needed to have a lot of workers. These workers needed to be cheap. Because of immigration, there was a large pool of cheap labor ready to be used by the factories.
For these reasons, the US economy industrialized and grew rapidly in the late 1800s.